Stanford issues bonds dated January 1, 2019, with a par value of $500,000. The bonds' annual...

Stanford issues bonds dated January 1, 2019, with a par value of $500,000. The bonds' annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $463,140.

1. What is the amount of the discount on these bonds at issuance?
2. How much total bond interest expense will be recognized over the life of these bonds?
3. Prepare an effective interest amortization table for these bonds.

Required 2

How much total bond interest expense will be recognized over the life of these bonds?

Total Bond Interest Expense Over Life of Bonds:
Amount repaid:
	payments of
Par value at maturity
Total repaid		0
Less amount borrowed
Total bond interest expense		$0

Prepare an effective interest amortization table for these bonds. (Round all amounts to the nearest whole dollar.)

Semiannual Interest Period-End	Cash Interest Paid	Bond Interest Expense	Discount Amortization	Unamortized Discount	Carrying Value
01/01/2019
06/30/2019
12/31/2019
06/30/2020
12/31/2020
06/30/2021
12/31/2021
Total

Expert Solution

ekkarill92 answered 1 year ago

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